Bitcoin, the King of cryptocurrency is well known among tech enthusiasts as a digital form of money. Generally, cryptocurrencies offer a new approach to verifying and tracking asset ownership. And aside from being a method of payment, a lot of investors buy and store Bitcoin for investment purposes. However, it’s crucial to point out that Bitcoin and cryptocurrency investment, in general, is very risky.
If you’re ready to venture into Bitcoin investment, there are several options available to buy the digital coin. As a beginner, investing in Bitcoin can be somewhat complicated. Hence, this guide carefully breaks down the easiest approach to investing in bitcoin and the wild ride and the year ahead.
Below is a detailed explanation of the steps required to purchase Bitcoin.
Adding Bitcoin to your investment portfolio
For a lot of people, the easiest to purchase Bitcoin is via a crypto exchange platform or a brokerage account. You can also buy Bitcoin using most of the digital wallets. However, this will concentrate on the simplest approach to buying Bitcoin.
Step One: Choose an ideal Bitcoin Brokerage or Exchange
The very first and vital step towards buying bitcoin is to choose a crypto exchange platform. This enables you to buy, sell and store your digital currency at will. Some of the popular exchanges include Coinbase, BlockFi, Robinhood, FTX, and many more.
We recommend you use an exchange platform that enables its users to withdraw their crypto assets to their crypto wallets for safe storage. But, if you’re to trade bitcoin, this feature isn’t necessary. A vital thing to note when registering with an exchange platform is to employ safe internet practices. This includes the use of unique passwords and two-factor authentication.
Step Two: Link Your Crypto Account to a Payment Option
Once you’ve selected an exchange platform, you will need to verify your identity by submitting some personal and vital documents. Depending on the exchange platform, some of the documents may include, driver’s license, passport photograph, Social security number, and so on. The information and data required from you depend on your region and the laws that apply within the region. The verification process is similar to setting up a bank account at a typical bank.
After the verification has been completed and your identity verified, the next step is to connect a payment method. For most exchanges, users can connect their bank account or make use of credit or debit cards. Once you’ve connected a payment option, you can now deposit funds into your crypto account. Note that exchanges charge varying fees for each deposit made into a crypto trading account either via bank deposit, credit, or debit card.
Step Three: Place a Purchase Order
After choosing an exchange platform, and connecting a payment method to your crypto account, you can now buy bitcoin.
With various digital coins going mainstream, crypto exchanges now operate on the same level as their stock exchange counterparts. In fact, crypto exchanges now offer similar features and outlines. Today, crypto exchanges offer limit and market orders as well as stop-loss orders. Apart from the various order types, crypto exchanges also offer various investment options for their clients to leverage in the crypto market.
Similar to the Forex and Stock market, once you’re certain the time is right, click on BUY to enter an order. The exchange will automatically convert your dollar to its Bitcoin equivalent. Immediately your order is executed, you’re officially a Bitcoin owner.
Step Four: Safe Storage
Cryptocurrency and Bitcoin wallets are used to store digital coins safely and securely. Storing your crypto asset outside of the crypto exchange assures you of its safety.
It’s best to store your crypto in a personal wallet if you’re holding it for the long term. This gives you control over the private to your fund. Storing your crypto away from your exchange also helps you avoid the risk of losing your fund in the event your exchange is hacked.
Although many crypto exchange platforms offer wallets to their clients, security is not always guaranteed as it is not their primary business. Hence, we do not advise you to store your Bitcoin in an exchange wallet for long-term holding. You can either use a Hot wallet or a Cold wallet.
Bottom Line
The cryptocurrency infrastructure and ecosystem are still quite complex, which makes buying Bitcoin a slightly complicated process. However, if you follow the steps discussed above, you shouldn’t have a problem adding Bitcoin to your investment portfolio.